Flat IB Heng Fa Villa

100 Shing Tai Road Hong Kong

Phone & Fax: 896 5246

Mr David Madel MP House of Commons London

SW1

United Kingdom

8 December 1992

Dear David

Over the 14 years I have been in Hong Kong there have been a number of difficult times when general confidence about the future was adversely affected. All were overcome, either by successful negotiation with China, or through the resilience of the Hong Kong people.

Today's problem between Governor Chris Patten and the Chinese Government seems to me to be the most serious situation in my 14 years here because, for the first time, there is no goodwill or common objective. There are only 55 months until the handover. I believe Britain must start working more positively with China to plan Hong Kong's future under the Basic Law.

The only way for Hong Kong to exploit its full potential is with the agreement and co-operation of China. Hong Kong is part of China, both physically and mentally. In the old days it was said that Hong Kong was dependent on China for its water and food, and this is still true. But today Hong Kong is critically dependent on China for its manufacturing base.

Never has Hong Kong needed China more. At the same time, China has never needed Hong Kong less.

Ten years ago China was closed and needed Hong Kong as its window on the world. Today, China has many windows on the world. Every Chinese city is not only open, but actively encourages foreign investment and trade. Civic leaders tour the world to promote their towns. Investors from all over the world (particularly the United States) flock to China seeking investment opportunities.

The Chinese people are energized by an extra-ordinary work ethic and many cities, led by Shanghai, would be delighted to take over Hong Kong's role vis-a-vis China.

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